Driven exclusively by gains in poultry and pigmeat production, global meat output is set to expand by nearly 2 percent to 302 million tonnes in 2012.
Most of the sector growth is likely to originate in the developing countries, as developed countries may witness a second year of slipping output as profitability stumbles in the face of high input costs, stagnating domestic meat consumption and severe competition from developing countries.
As disease concerns in Asia abate, the pigmeat sector is poised for a quick recovery
After last year’s drop, global pigmeat production is expected to rebound by 2.6 percent in 2012 to 111.7 million tonnes, underpinned by gains in Asia due to reduced incidence of disease. In the region, policy support, growing investments and favourable market returns, particularly in China, are behind an anticipated 4 percent expansion in the region’s output to 62.8 million tonnes. The sector may also recover in Japan, following a rebuilding of sow inventories and a return to normal piglet births in provinces affected by the nuclear fallout in 2011. Investments in breeding and feed industries in Vietnam will support output growth, while a rebuilding of FMD-depleted inventories in the Republic of Korea is stimulating a 20 percent production recovery.
In South America, high beef prices are indirectly supporting the expansion of the pigmeat sector in Brazil, Chile and Colombia while, in Argentina, sporadic restrictions on pigmeat imports from Brazil are creating incentives for investment. The recognition of Mexico as free of classical swine fever has opened new market access opportunities which, combined with investment in new breeding lines, supports an increase of the country’s production and exports in 2012.
Anticipation of new EU environmental regulations that will become effective in 2013 has catalyzed a restructuring and concentration of hog operations that may translate into fewer pigs and lower production in 2012. Despite tight margins, a shift by consumers in North America from beef to lower priced meat products is expected to strengthen demand and translate into higher production. Investmentdriven gains in the Russian Federation are foreseen to boost production by 5 percent despite persistent occurrences of African swine fever.
Pigmeat trade may decline in 2012, as Asian import demand falters
After witnessing double-digit increases in Asian import demand in 2011 due to its disease-reduced output, improved production in the region is forecast to result in global pigmeat trade falling to 7.0 million tonnes in 2012. Reduced purchases by China, the Republic of Korea and Japan, amid large supplies, underlie this expected contraction. This is despite the expected ratification by the Russian Federation of the WTO accession treaty later this year and the signing of a free trade agreement between the Republic of Korea and the United States. It is clear that the Russian Federation will only ease restrictions on pigmeat imports when it officially joins the WTO in mid-2012. Until then, imports by the country will be negatively affected by a reduction of its tariff-rate import quota from 470 000 tonnes in 2011 to 400 000 tonnes this year, which may result in smaller pigmeat purchases. By contrast, imports by Chile, Colombia, Mexico and Uruguay look set to increase, while Argentina’s “off-and-on” restrictions on imports of Brazilian product may lower deliveries to the country.
Declining trade prospects in 2012 set the stage for considerable competition among the major exporters – the United States, the EU, Canada and Brazil – which together account for nearly 90 percent of global trade.
Lingering Russian restrictions on imports of Brazilian products may contribute to lower exports from Brazil in 2012, while benefiting smaller international suppliers, such as Chile and Mexico, but also the United States and Canada.
May 2012/ FAO.